Behavioral-health provider Psychiatric Solutions, Franklin, Tenn., said it has acquired five inpatient psychiatric facilities in Florida and Kentucky from privately held United Medical Corp., Windermere, Fla. The companies did not disclose financial details, but Psychiatric Solutions said in a news release that the facilitieswhich will add 300 acute-care beds and about 100 residential-treatment bedsare expected to generate $68 million in revenue in the next 12 months.
Ryan Daniels, a William Blair equity analyst who covers Psychiatric Solutions, said in a research note that he expects the market to respond favorably to the deal for a number of reasons. In addition to adding 4 cents to the companys 2008 earnings-per-share and driving earnings growth above 30% for the year, the transaction also positions Psychiatric Solutions well to meet or exceed managements goal of at least six acquired facilities by June 2008, the note said. And, third, it should relieve some investors concerns that the companys acquisition pipeline is drying up, Daniels wrote. We also believe the assets were fairly high-quality facilities so we believe they will fit well within the companys current infrastructure.
Psychiatric Solutions provides behavioral health programs to critically ill children, adolescents and adults in 31 states, Puerto Rico and the U.S. Virgin Islands. It also manages free-standing psychiatric inpatient facilities for government agencies and psychiatric inpatient units at hospitals it does not own. -- by Jessica Zigmond
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